Appraisal reports relating to residential real estate are taken to be documents full of complexity and a wide market data with documented procedures used to estimate value. Similarly the report can be a problem to seasonal real estate professionals in terms of comprehension. This contributes to many users bearing interest only on value statements.
In real estate transactions, professionals prefer the reports to help them in on residential real estate. Not considering the property owner or the appraiser, the report is also used in valuations of the residential real estate. Being in their area of practice, appraisers ought to have a wide knowledge of the environments that may affect a property’s final valuation.
Appraisal reports on the residential real estate are able to check any particular properties of a property and those of their surrounding like a specific style of architecture in a property.
The reports also consider other aspects such as the roofing conditions and renovations in a property.
After visiting a particular property, the appraiser determines the appropriate value of that property by considering, the location of the property, previous appraisals, and the property’s comparable homes. Later on, findings of the research and observation are compiled into a report indicating the property’s value and the reason and method used in estimation.
The appraisal report on residential real estate should have the certain elements. Purpose of the report should be the first element. The report need also highlight the valuation method used in the report. The report should also describe in details the property’s characteristics. There should also be a statement in the report detaching the appraiser from any financial interest in the property. Lastly, the report should contain the signature and qualifications of the appraiser.
It’s worth noting that every part in the appraisal report is very crucial and it’s what will help users understand the final valuation of the given residential real estate. Remember also, that appraisal is not a science but an art. The part of the report worth keen attention is that explaining the approach used in the determination of the value of estimation of the property.
The approach mainly bases its work on comparable properties sale prices recently. Based on the similarity of properties, appraisers collect information of recent sale of the properties. As similarity in properties do not bring the essence of them being identical, valuation adjustments are then done. Basing on the subject property, adjustments on valuation are then done upward or downward.
Having knowledge on the appraisal report is very vital to any homebuyer. It as well damns to be an important tool of transaction in real estate which requires clear understanding by users.